I would like to have each instance of an app shown on the taskbar, but automatically grouped together. Like the first image, but not like the second. Is there a way to configure this?

If I understand what he was asking for correctly, he is asking if there is a way to have all individual buttons shown for each window open, but each button is organized on the taskbar (or grouped) by app. So I could have 10 chrome windows open, and 5 excel windows open, they would all show on the taskbar, but they would automatically have all 10 chrome windows organized next to each other, and all 5 excel windows next to each other. Is this possible to do now?

Now, a few years down the line, is this feature implemented?
Because I can not find it.

Edit: To be clear, the current option that is called 'Group Buttons' is combining then, not actually grouping them next to each-other.

I realize the OP request is old, but nobody has yet mentioned that the requested functionality is avaialable as part of the Win 10 taskbar configuration.

Is it different than I've stated in my previous comment?
If so, could you guide me the exact setting? Because I can't find it.

Here's the Win 10 setting area. I can't see your protected attachment images, so I can only go by what you've described. I have the Combine tasbar buttons setting set to Never, but that's because I prefer the indiviual window tabs to appear on the taskbar of the monitor on which they're located.

I think you misunderstand the issue. This is not about the taskbar of Windows, but about the taskbar of DisplayFusion.
I tried what you said, and when you set the Windows combine setting to 'never' and have 'grouping' option of DisplayFusion enabled, it still combines them on the DisplayFusion taskbar.

We do want the grouping, but not the combining. And, as Owen mentioned, it's not implemented (yet).

Thanks though for trying to help

(Accidental double post. Can't find a way to delete it.)

I did forget to mention that I use an additional utility: 7+ Taskbar Tweaker (Ramen Software). This utility also provides functionality controlling the combination (or not) on the taskbar of grouped application buttons. In my configuration, I use both Windows and DF taskbars. I use Windows' on my primary monitor, and I use DisplayFusion taskbars on my 2nd and 3rd monitors, but 7+ Taskbar controls all taskbars in use.

Note: The settings in the attached screenshot represent my taskbar preferences, not suggestions for how you would configure for your situation.

The utility was designed for Win 7 but works equally well for Win 10. You can safely ownload it from MajorGeeks.com.
https://www.majorgeeks.com/files/details/7_taskbar_tweaker.html

The 7+ taskbar tweaker, did not do what you suggested it would do. DF taskbar is in no way listening to any configuration set in the 7+ taskbar tweaker. I'm on Windows 10. Even restarted Windows and both tools after any relevanty changes.

All I can say is that it works for me, and I've been using the combination for years. And as I mentioned, I use a combination of two DF taskbars and one Windows taskbar on my primary monitor. Perhaps changing one of yours to Windows' might do the trick.

Best of luck!